Why your Netflix streaming stinks, and who's going to pay to fix it

Wondering why you've had increasing problems with Netflix movies buffering or failing to load? There's little question anymore than your ISP is to blame. Are they justified in holding back that network traffic? Getting the problem fixed is a question of who's going to foot the bill.

Cogent Communications CEO Dave Schaeffer recently told Ars Technica that his company's network traffic — more specifically, traffic from their client Netflix — is being held hostage by Internet service providers like Comcast and Verizon. That's because of something called peering, and Comcast and Verizon's insistence that Cogent pay them to get them to accept its traffic. Ars Technica:

Cogent has refused to pay. As negotiations stall, Netflix performance has dropped measurably for months on both Verizon and Comcast. Cogent claims this is because Verizon and others—but especially Verizon—are refusing to upgrade the connections between networks. Cogent points out that Verizon offers its own streaming video services, such as Redbox Instant, and thus has an incentive to harm Netflix traffic.

Verizon denies that it is hampering Netflix traffic to promote Redbox Instant specifically, but it doesn't deny that it has a problem with Cogent. It also points out that it's come to peering arrangements with other companies, but says that Cogent is unique in its insistence that it shouldn't have to pay.

What hangs in the balance here is your own experience streaming content from Netflix. Until this gets resolved, expect to continue to have problems watching your movie without interruptions or at lower quality than you should be able to receive it, thanks to Cogent's standoff with your ISP.

One solution for some broadband customers might be to take their business to someone else who isn't fighting with Cogent. But that's easier said than done. In many areas, like where I live, you can't just shop around for another broadband provider: my two choices are Comcast or (the much slower) Verizon DSL. If I lived 20 miles northwest of my current locations, I could get Comcast or Verizon FIOS. But I'd still be in the same boat.

The problems between Netflix, Cogent and ISPs illustrates a very real and potentially damaging issue as new services appear that try to make use of distributed content — whether that's a streaming movie or an emerging cloud service: ISPs are the gatekeepers to the customers. And if you're not willing to play nice with the ISP, chances are you're going to have a problem providing reliable service to your customers.

Some lawmakers and some policy wonks would love to see the government change the way ISPs work to make them common carriers. That would enable the feds to regulate the way your ISP works and would potentially make it easier to enforce net neutrality, providing a level playing field for everyone with an Internet service to offer.

But it's not going to change the physical bandwidth limitations that ISPs are hitting to provide customers with this access. And that bandwidth costs money to provide. But from Cogent's perspective, ISPs are making a hell of a lot of money off their customer base and owe it to them to provide good service — they see ISP attempts to throttle their traffic as a violation of that arrangement.

Netflix is by some measure producing one-third of the combined download traffic of US internet connections at peak times. They have over 33 million subscribers in the US (another 11 million outside the US). While Cogent is the heavy here — taking the brunt of the PR associated with this standoff, there's a case to be made that Netflix could be doing more to improve the efficiency of its streaming technology (right now, it uses Microsoft's VC-1 codec).

Inside baseball on streaming technology notwithstanding, someone's eventually going to blink. Either Cogent and Netflix are going to pony up cash to get the ISPs off their backs or the ISPs are going to open up the floodgates and let that traffic through. The other possibility is that if the ISPs continue to throttle Netflix traffic, customers will leave the service. No

But to answer the question I posed in the headline: Who will pay for it? I think there's little question that whether the change comes from the ISP or from Cogent, chances are good that you're going to be stuck with the final bill. Either your ISP rates will go up or Netflix will end up charging more.

Have you run into streaming problems with Netflix or other bandwidth-intensive services? Are you fed up with your ISP playing chicken with content companies? Let me see your thoughts in the comments.